Gartner: Strategies to Compete in a Digital World

"Like it or not, we live in a digital world," Gartner Fellow Stephen Prentice opened a talk at Gartner Symposium on tech and social trends that will impact businesses. While he mentioned a number of specifics, Prentice said these trends will impact each business differently, so it’s important to scan the trends to help figure out new digital strategies.

"Like it or not, we live in a digital world," Gartner Fellow Stephen Prentice opened a talk at Gartner Symposium on tech and social trends that will impact businesses. While he mentioned a number of specifics, Prentice said these trends will impact each business differently, so it’s important to scan the trends to help figure out new digital strategies.

"There is no silver bullet," Prentice said. No one trend will change the world, but a combination will. Companies should survey the business environment and the societal trends. "If you look only at technology trends, you will miss all the interesting stuff," he said.

Considering social issues, this year, the planet’s population will pass seven billion and that will create generational conflicts. Educational advancements, health care (girls born today have a three in four chance of living to 100, Prentice said), globalization, and sustainability will also impact business trends.

Communication technologies are growing fast, as there now are 4.5 billion mobile phones and two billion web users. After 30 years of "being terrorized by QWERTY," Prentice said, we now have other ways of communicating with our computers. In addition, we now have new analytics and many areas are becoming digital.

On the business side, Prentice discussed "value centricity," when people only want to do business with companies they like. In addition, there are demand-side trends like global volatility and disintermediation; and supply-side trends such as using information as strategies, mobility, and digital business opportunities.

The fact that the trends are happening is not as interesting as why they are happening. "Technology succeeds when it meets a need that people care about," Prentice said, quoting Genevieve Bell of Intel. Thus, societal trends are more important than technology trends.

Too many tech people treat people like technology, but people react differently. We use technology in a way that suits us, not necessarily in the way it was intended.

We're in the middle of the information age, but in the latter half of the technology wave, Prentice said. In this first half of the wave, we saw an explosion of new technologies; in the second half of the wave, we are seeing new uses of those technologies. That’s where we are now—most of the technologies we’ll see in the next decade are already in the labs. But, we will see new ways of exploiting the technology and using it to create new business models.

In particular, Prentice focused on the concept of "activity streams," showing what people do with the technology, information, and devices. Overall, information provides context for activity streams. Technology enables activity streams and business is the exploitation of these streams. Devices are predictable, but people are not.

All this will not only change businesses, but our lives, as well. Technology changes how we think and we use the Internet as an extension of our memory, so we remember fewer things, for instance.

We’ve spent 30 years in a device-centric world, but now we’re in an application-centric world. As such, Stephen Elop moved Nokia away from Symbian, declaring “the battle of devices has now become a war of ecosystems.”

Permission-based ecosystems—where the company has to approve new applications—counter permission-less ecosystems, like open source, which are a disruptive force that only emerged with technology.

All this leads toward digitally accelerated business models. In many of these models, products appear to be free. There are a number of variations, including "value transfer" like Google selling customers usage to advertisers rather than charging users; “freemium” models like Skype; and micro-pricing, which predicts that if you drop the price enough, people won’t think about it, like a 99 cent app song.

The technology isn’t holding us back any more, Prentice said. It’s a matter of coming up with the new business models. In a couple of years, we won’t talk about a digital age, because it will be everything.

As a result, companies need a digital strategy which should ask: Who are my customers? What do they need? What do I mean to them? And how can technology make me indispensible?

Prentice presented five components of a digital strategy: a "thing" strategy around the devices and services created; a "technology" strategy; a "people" strategy, for dealing with customers and employees; an "information" strategy to understand the new forms of information out there, often created by smart devices; and a "business model" strategy. (See the diagram.)

New forms of data will challenge IT structure and assumptions, and this will enable new business models, often based on products and services that are free or nearly free. For example, Prentice exaggeratedly stated that there are no bookstores left in San Francisco because of the prevalence of e-readers. People’s priorities conflict; they shop for discount food while talking on a $700 smartphone.

All these trends are working together, and Prentice urged the audience to look beyond the visible trends and develop a digital strategy to respond to them.

The world now generates 275 exabytes of Internet traffic per year, but will generate that much each day by 2020. "How will you tap into that information and exploit in, rather than being run over by it?" Prentice asked.

He ended by quoting Peter Drucker: "In a few hundred years, when the history of our time is written from a long term perspective, it is likely that the most important event historians will see is not technology, but the unprecedented change in the human condition. For the first time, people have choices."

Michael J. Miller's Forward Thinking Blog: forwardthinking.pcmag.com
Michael J. Miller is chief information officer at Ziff Brothers Investments, a private investment firm. From 1991 to 2005, Miller was editor-in-chief of PC Magazine, responsible for the editorial direction, quality and presentation of the world's largest computer publication.
Until late 2006, Miller was the Chief Content Officer for Ziff Davis Media, responsible for overseeing the editorial positions of Ziff Davis's magazines, websites, and events. As Editorial Director for Ziff Davis Publishing since 1997, Miller took an active role in...
More »